by Philip Haddon on Jul 06, 2010 at 13:14
A survey of Spanish fund managers carried out by Lipper shows there was a large swing from equities to bonds in June, while fund managers are becoming increasingly attracted to US equities.
The aggregate average asset allocation to bonds rose to the highest levels seen since the first month of the Lipper survey back in November 2005. The reading of 40.4% in June was up from 36.6% in May.
The main fixed income sectors contributing to the rise were eurozone and emerging market debt. The rise in average allocation to eurozone bonds, from 34.7% to 38.8% shows the confidence among Spanish managers in the health of the eurozone, despite the economic troubles and market volatility of recent months, according to Lipper.
In fact, 38% of fund managers in Spain are now overweight eurozone debt, compared to only 15% in May.
In contrast, allocation towards equities fell from 40.5% in May to 37.7% in June, according to the survey of thirteen of Spain’s biggest fund managers, including Santander Asset Management, BBVA Asset Management and Invercaixa Gestión.
However, 46% of the panel are overweight eurozone equities, while 46% are also looking at increasing their exposure to US equities in the coming months.
Not a single one of the fund managers questioned is underweight in cash currently, with 69% neutral and 31% overweight. However, despite remaining high, overall cash levels were down slightly in June, to 18%.
On the currency front, 50% of respondents expect the US dollar to produce the best returns in the next 12 months, while only 28% thought the euro would be the currency winner.